The Chancellor was snapped leaving Number 11 this afternoon holding a highlighted A4 sheet of paper alongside his briefcase, ahead of a crunch meeting about the UK economy with the 2019 intake of Tory MPs. The document appeared to be the speech he had prepared for disgruntled Tory backbenchers, which said there would be “difficult” decisions ahead, but added there would not be a “horror show of tax rises”.
Eagle-eyed observers shared the image of Mr Sunak’s paper on social media, which read: “We will need to do some difficult things… Now this does not mean a horror show of tax rises.
“But it does mean treating the British people with respect, being honest with them about the challenges we face.”
Boris Johnson and Mr Sunak addressed the Tory MPs elected in the 2019 general election, amid growing concerns over the direction of the Government following a series of embarrassing U-turns.
Many Tory MPs, especially those in former Labour constituencies in the north of England, are said to be “jittery” about losing their seats at the next election, amid the prospect of sweeping cuts.
At the meeting, Mr Sunak stressed the need to be honest with the British public about the economic challenges the country faces.
The Chancellor insisted his aim is to ensure the UK has a “dynamic” and “low tax economy”.
He said: “We will need to do some difficult things, but I promise you, if we trust one another we will be able to overcome the short term challenges… Now this doesn’t mean a horror show of tax rises with no end in sight.
“But it does mean treating the British people with respect, being honest with them about the challenges we face and showing them how we plan to correct our public finances and give our country the dynamic, low tax economy we all want to see”
Mr Sunak also took a swipe at the last Labour Government and stated he would not continue to borrow money to service the economy.
He added: “We cannot, will not and must not surrender our position as the party of economic competence and sound finance.
“If we argue instead that there is no limit to what we can spend, that we can simply borrow our way out of any hole then what is the difference between us and Labour.”
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Paul Johnson, Director at the IFS explained any rises will need to come thorough income tax, national insurance contributions and VAT.
He said: “I would expect in the medium run at least increases in those taxes simply because that’s where significant amounts of income comes from.”
The IFS economist added a two or three percent increase of the basic rate of tax of 20 percent “is not going to do any significant economic damage”.
Mr Johnson insisted focus should be of VAT changes, pointing out the money raised when it was increased from 17.5 percent to 20 percent in 2011.